AUSTRALIA

Neighbourhood Shopping Centre investment traction continues into 2015

2015-08-06T14:00:00Z

PCL sells Croydon Central in Victoria for over AUD 40 million

Acting on behalf of PCL, Simon Rooney of JLL has exclusively negotiated the sale of Croydon Central Shopping Centre, Victoria for over AUD 40 million. The Centre was acquired by Haben Property Fund, on a fully leased initial yield of 6.95%.

Croydon Central is a dominant Melbourne metropolitan neighbourhood shopping centre. The property is strategically positioned for redevelopment with rezoning of the entire site to a 'Commercial 1 Zone'.

In its current configuration Croydon Central is anchored by a strong performing Coles supermarket, Aldi supermarket, one mini major, 31 specialty tenancies, three kiosks & four ATMs, providing a total GLA of 9,588.7sqm and car parking for 768 vehicles.

The centre is conveniently located 30km east of the Melbourne CBD within the suburb of Croydon. Croydon town centre is classified as a Major Activity Centre in the Victorian Government's Metropolitan Planning Strategy - Melbourne 2030, further adding to the significance of Croydon Central's dominant location within the catchment.

JLL's Australian Head of Retail Investments, Simon Rooney said, "Shopping centres with high grocery and food retailing exposure have continued to perform well. Retail spending within the non-discretionary food category has grown by 4.7% year on year as at May 2015, and 4.2% per annum over the last five years – faster than all other major retail categories except for cafés, restaurants and take-away food (5.1% p.a.)

"Total neighbourhood transactions for 2015 year to date have reached AUD 873 million across 31 transactions, already exceeding the annual long-term average of AUD 800 million. Volumes reached a record AUD 1.9 billion in 2014 up 49% from AUD 1.3 billion in 2013. The number of neighbourhood transactions also increased very significantly in 2014, having risen to 71 transactions from 43 in 2013.

"We continue to see robust demand for assets from a widening range of institutional and private investors. The heavy focus on the non-discretionary based neighbourhood sector at present reflects the attractiveness of defensive assets which provide long term stable income returns and strong potential for capital growth."

JLL Research shows neighbourhood yields nationally range between 6.25% and 9.25% and a weighted average mid-point of 7.55% as at Q2 2015.